If you are willing to incorporate in Taiwan, this article explains the tax laws in Taiwan for a LLC, which is the most common company structure in Taiwan.
A Taiwan resident company is liable to tax on its worldwide income, irrespective of source. The predominant estimated tax rate for offshore income, from our research, but seek professional advice, is 17%. Taiwan does not have known exemptions to remit income earned outside its borders. Taxes are lower than average in Taiwan because the highest corporation tax rate is 17%. Taxable income up to TWD 120,000 may be tax exempt. Undistributed profits may be subject to a surtax of 10%. Taiwan ranks 59th overall with regards to CIT globally.
The valued added tax rate is 5.00%, that ranks Taiwan as 27th when compared to value added tax rate worldwide. Certain goods and services from specified industries are subject to a Gross Business Receipts Tax at a rate from 1% to 5%. Certain commodities are subject to Comomodity Tax from 8% to 30%. In terms of other taxation, an employer will contribute 17.81% to the equivalent of a social security fund and an employee will contribute 4.49%. The overall complexity of the tax system is low. This is measured by average time to comply with a country's labor tax requirements is as it is 27hours. Contributing to this is the number of yearly labor tax payments, which is 5 in TW.
Thin cap standards are in effect. This refers to any sort of restrictions on given company with respect todebt-to-asset ratios.
Dividends received by a resident entity from another resident entity are not included in taxable income. Dividends received from foreign entities are taxable, but there is usually a tax credit for foreign tax paid limited to Taiwanese tax rates. Dividends are payments of earnings of the business, voted by the board of directors, to a particular class of shareholders. Dividends can be one of the following stock, cash, or property.
Capital Gains are usually taxed as ordinary income. However, those from the disposal of Taiwanese marketable securities and futures are treated separately and subject to Income Basic Tax at a flat rate of 12%. If securities are held at least 3 years, a 50% exemption may apply. Securities transactions are subject to 0.3% on the gross proceeds. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.
The interest withholding tax rate is estimated at 20%. This should be interpreted that the taxman expects LLC's to pay tax at 20% of interest payments remitted abroad. Certain interest payments may be subject to a reduced rate of 15%. The dividends withholding tax rate is 20%. This should be interpreted that the tax authorities expects companies to automatically withhold 20% of dividends paid to non-residents. Royalties are subject to a withholding tax of 20%. Which means that a resident entity should withhold 20% of its payments on royalties to non-residents. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Taiwan. There are inheritance, transfer and real property taxes in Taiwan. There are frequently implemented credits for innovation spend that include breaks on taxation in this country.
The above is not tax or legal advice for your particular circumstances. We are able to to reference you to a lawyer in Taiwan who can give you an answer. Ready to get started? Click the free consultation button above or press incorporate now if you are in a hurry.
It takes approximately 161 hours to file and prepare documents for a Taiwan Civil Law.
The corporate tax is approximately 17% which is 59 in the world.
Owners of a company in Taiwan are not allowed to carry back a loss and may be allowed to carry forward a loss for 10 years.
The vat rate in Taiwan is 5% which ranks 26 in the world.